Oklahoma Senate panel approves bond debt limit
OKLAHOMA CITY (AP) — An Oklahoma state senator convinced an appropriations committee Wednesday that the state should amend its constitution to limit how much it can borrow by issuing bonds, even as legislators face a crumbling Capitol and other potential state projects that could cost hundreds of millions of dollars.
The Senate Committee on Appropriations approved a proposal from Sen. Josh Brecheen, R-Coalgate, that would cap each year's debt service payments, which are essentially interest payments to people who hold state bonds. In practice, Brecheen's plan would put a limit on how many bonds the state could sell each year to fund major public projects.
Interest in potential state bond issues rose after Gov. Mary Fallin called for repairs to the Capitol, estimated to cost more than $150 million, in her State of the State address earlier this month. But many of her fellow Republicans, who control both houses of the state legislature, have been reluctant to pursue the costly idea.
Brecheen told the committee a limit could address those concerns.
"Many of us would possibly change our minds on issuance of new debt if we knew there was some limit," he said.
The proposal would ask Oklahoma voters to decide whether to limit the state's annual debt service payments to 4.5 percent of the previous five years' average general revenue. The bill also would allow the Legislature to declare emergencies and take on more debt.
At the moment, Oklahoma's annual debt service payments total less than $200 million, or about 3.4 percent of the latest revenue average, State Bond Advisor Jim Joseph told The Associated Press. Those payments come from roughly $1.5 billion in tax-supported debt, he said.
Several committee members asked if the limit would allow for the Capitol repairs, which many politicians see as increasingly necessary.
Joseph told the committee the state could safely issue $500 million more in bonds under the proposed limit — more than enough to fund Capitol repairs and complete other state projects, including a pop culture museum in Tulsa and the still-unfinished American Indian Cultural Center and Museum in Oklahoma City.
"That's just a ballpark figure they could use in planning," Joseph later told the AP.
The bill now heads to the full Senate for consideration.